A title search is performed on each transaction. The title records are only as good as the documents recorded. If a previous owner perpetrated a fraud, committed a forgery or the clerk of the land records failed to record or recorded incorrectly, the purchaser is unprotected without owners title insurance. With the coverage, the title insurance company incurs the expense of determining the validity of a claim and defending against the claim. If there is a title defect, the title insurance company pays the claim so that the purchaser retains ownership without loss, or compensates the owner for any and all losses incurred as a result. The cost of the owner’s title insurance premium is modest in comparison with the potential loss from a claim. Owners title insurance is a one-time premium.
The title insurance protects you, the property owner, and the lending institution that holds your mortgage from unforeseen claims that may arise against your property. The policy provides protection from financial loss and payment of legal costs associated with such claims.